Tuesday, April 14, 2015

Why organizations are going to find it increasingly hard to raise money

Kony 2012 made by the invisible children's charity organization which is advocating for the end of the LRA war, became the most viral video in a short period of time with 100 million views in just a few days. According to their financial records, the organization raised $26 million. However the film was criticized for overly simplifying a complex story and in turn, donations in 2013 amounted to a merger $4 million out of a budget of $15 million.

The organization which was started by Jason Russel and his two college mates announced recently stated that they will be closing down their operation. At their peak, they employed 300 people but now they are down sizing to 5 staff who will mostly work remotely on  advocacy work.

The invisible children is only one of the many organizations that are facing difficulty in raising funds to sustain their programs. Here is why I think organizations are going to find it increasingly hard to raise money.

Everything now has to be quantifiable

In the past, organizations received funding for their projects and in turn submitted a report that appealed to peoples emotions rather than their rationale. Which made sense because sometimes change cannot be quit quantified but the donors were happy as long as they knew their dollars were making somewhat of a difference no matter how vague that might have sounded. However, now days, donors are like investors, they like to see the return on their investment and an organization has got to be deliberately outline what their targets are, so that when they present an accurate report (hopefully), it clearly reflects against how they performed.

Priority in expenditure

About ten years ago when organizational work especially in this part of the world (Uganda) was high, it was a normal thing for an organization to buy cars, pay for high end offices and payout large severance packages to their staff, which made sense at the time because, for an organization to be credible, you must do all the above. However after the recession, it has become increasingly important for organizations to ensure their money goes the extra mile therefore any organization will understand that the only reason people give towards their cause is because it will benefit the end benefactor (usually victims). Therefore, now, organizations need to closely consider their expenditures, focusing most of their resources on their main purpose of existence which is their work because its what will speak volumes. Not the cars or well paid staff. And since donors are more stingy with their money (blame the recession) an organization has got to have its act together if it hopes to keep those dollars coming in.

Reinventing the story

Initially when an organization start out, it has a core cause to which they call upon people to be apart of and for the start it is exciting, however 5 years down the road and countless newsletters, it is not as exciting. Also keeping in mind that the people who would have supported the cause are like every other consumer who are bombarded with tons of information a day. An organization has to take on a business approach to marketing, to cut through the clutter to assure the donor why they should care about their cause, even after a few years. This will require organizations to create captivating and high impact media essentials that will resonate with their target audience.

For what it is worth, Invisible children is the perfect example for reinventing the message. Kony had been talked about for over 20 years so much so that all major world media houses had carried the story at one time or another. However IC was able to reinvent the message to reignite the fight against the war lord, using a modern day approach; social media. Other organizations should pick a leaf from this.

And good luck fund raising.

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